Health Savings Accounts

A Health Savings Account (HSA) is an account that you can put money into to save for future medical expenses. There are certain advantages to putting money into these accounts, including favorable tax treatment.

Advantagesof HSAs

Benchmark Bank HSA Program Features:

Low monthly fees

Free debit cards for account holder and additional signer**

Free online banking

Informed and accessible customer service

You have the choice of where to place your HSA deposits

Security
Your high deductible insurance and HSA protect you against high or unexpected medical bills. Flexibility - You can use the funds in your account to pay for current medical expenses, including expenses that your insurance may not cover, or save the money in your account for future needs, such as:

Health insurance or medical expenses if unemployed

Medical expenses after retirement (before medicare)

Out-of-pocket expenses

Long-term care expenses and insurance

Savings
You can save the money in your account for future medical expenses.

Control
You make all the decisions about:

How much money to put into the account

Whether to save the account for future expenses or pay for current medical expenses

Which medical expenses to pay from the account

Which company will hold the account

Portability
Accounts are completely portable, meaning you can keep your HSA even if you:

Change jobs

Change medical coverage

Become unemployed

Move to another state

Change your marital status

Ownership
Funds remain in the account from year to year, just like an IRA. There are no “use it or lose it” rules for HSAs.

Tax Savings

An HSA provides you triple tax savings:

tax deductions when you contribute to your account;

tax-free earnings through investment; and

tax-free withdrawals for qualified medical expenses.

Using Your HSA

You can use the money in the account to pay for any “qualified medical expense” permitted under federal tax law. This includes most medical care and services, dental and vision care, as well as prescription drugs.

HSAContributions

You can make a contribution to your HSA each year that you are eligible. You can contribute no more than:

$3,350*—Self-only coverage- 2016$6,750*—Family Coverage- 2016

$3,350*—Self-only coverage- 2015$6,650*—Family Coverage- 2015

Individuals age 55 and older can also make additional “catch-up” contributions.

Any adult can
contribute to an
HSA if he/she:

Has coverage under an HSA-qualified “high deductible health plan” (HDHP).

Is not enrolled in Medicare. Cannot be claimed as a dependent on someone else’s tax return.

Contributions
to Your HSA

Contributions can be made by you, your employer, or both. However, the total contributions are limited annually.

If you make a contribution, you can deduct the contributions when completing your federal income tax return.

Contributions to the account must stop once you are enrolled in Medicare. However, you can keep the money in your account and use it to pay for medical expenses tax free.

High Deductible
Health Plans

Generally, this is health insurance that does not cover first dollar medical expenses. Federal law requires that the health insurance deductible be at least:

$1,250*—Self-only coverage$2,500*—Family coverage

In addition, annual out-of-pocket expenses under the plan (including deductibles, co-pays, and co-insurance) can not exceed:

$6,350*—Self-only coverage$12,700*—Family coverage

In general, the deductible must apply to all medical expenses (including prescriptions) covered by the plan.

However, plans can pay for “preventative care” services on a first-dollar basis (with or without co-pay). “Preventative care” can include routine pre-natal and well-child care, child and adult immunizations, annual physicals, mammograms, pap smears, etc.

**Approval Required

Benchmark Bank and its employees are not tax consultants, please consult a tax advisor. The U.S. Treasury’s website has additional information about Health Savings Accounts, including answers to frequently asked questions, related IRS forms and publications, technical guidance, and links to other helpful websites. The U.S. Treasury’s HSA website can be found through www.treas.gov (click on “Health Savings Accounts”) or directly at the following address: http://www.treas.gov/office/public-affairs/hsa/.